Norwich City Council rejects $8.47 million economic development bond

Norwich — The aldermen late Monday rejected a proposed $8.47 million economic development bond along party lines following heated debate, leaving questions going forward about whether the proposal will return in some form.

Objections from aldermen and public hearing speakers included the high amount proposed for economic development incentives to developers in downtown and other key areas and that the proposal was rushed to get it onto the Nov. 6 ballot.

The council's four Republicans voted in favor and the three Democrats voted against, but the measure needed at least five votes in favor to be approved.

Debate became heated at times Monday, as aldermen passionately argued their points. Democratic Alderman Joseph DeLucia called for a recess to hold closed-door party caucuses, which lasted 13 minutes.

Republican Mayor Peter Nystrom had proposed the $8.47 million to expand the existing $3.38 million downtown revitalization program voters approved in 2010. The Norwich Community Development Corp., which administers the downtown bond, told the City Council the $2.47 million committed from that bond has yielded $22.8 million in economic impact thus far.

Nystrom became angry in response to criticism of lack of information about the bond package and lingering questions. He said aldermen with questions should have spoken up and presented those issues at the start, rather than "waiting for an email." He said during last fall's election campaign, all candidates spoke about attracting new development to the city.

"I'm really surprised at this," Nystrom said, shouting at fellow aldermen. "Communication is a two-way street. What did you do?"

The new bond would have expanded the downtown program to other targeted areas of the city, such as Taftville, Greeneville, Norwichtown and Thamesville, while half would be retained to continue the downtown effort.

Nystrom on Tuesday said he was still upset at the vote and blamed the Democrats for playing politics.

"The actions last night, they are a setback for the city," Nystrom said Tuesday, "but I don’t think those other three councilmen care about that."

Nystrom said going forward, he will concentrate efforts on the city's waterfront, seeking to create a master development plan for key parcels, starting with the Marina at American Wharf. He said the first step would be to decide what types of development the city wants for various properties, including the marina, the scrapyard on the harbor's east bank and the former Shipping Street industrial district on the west bank of the Thames River.

Related story: Norwich officials to meet with prospective marina buyer

"It's premature to talk about a dollar amount for the waterfront," Nystrom said. "We're talking about what uses would be appropriate. It starts with the marina."

Democratic Alderwoman Stephanie Burnham said she sent a list of some 20 questions to NCDC President Robert Mills on Aug. 5, including how the return on investment was calculated, and said most were not answered until earlier Monday in an email. She and DeLucia also pointed out that some recipients of the downtown bond have gone out of business, and one owes back taxes.

They argued that planning for the bond package should have started in March, shortly after a council strategic planning session that set economic development as one of the top three goals for this council.

“I’d love to vote for this, next year, when the questions have been answered,” Burnham said.

On Tuesday, Mills said it's uncertain whether the bond proposal would return next spring for a second shot at putting it on a referendum ballot. Based on Democrats' questions, he will analyze the outcomes of the 2010 bond more closely and answer those questions.

He also said in the meantime, Norwich should work on how to take advantage of the new federally designated Opportunity Zones, where investors can turn anticipated capital gains taxes into tax credit investments in developments within the zones. Norwich was approved for three zones that encompass much of downtown, Thamesville and Greeneville.

Democratic Alderman Samuel Browning said maybe Norwich doesn't need a predesignated economic development bond, but rather could create a development incentive program and have developers seek assistance for proposals at specific properties.

During the council meeting Monday, Nystrom objected to claims that Norwich is not seeing an economic boom now, citing numerous new businesses and expansions. But he said the city needs to take advantage of bigger developments in the region, including the new convention center at Mohegan Sun and the Mohegans’ plans to develop a major mixed development at the former Norwich Hospital in Preston.

Nystrom apologized to Burnham at one point for calling her “young lady” as he stopped her from interrupting his comments.

Republican Alderman William Nash said the council should have taken the risk and sent the proposal to the voters for the referendum. Republican Stacy Gould argued that the bond authorization did not commit money up front, and details could be worked out as the program moved forward.

“I don’t feel we were engaged soon enough,” DeLucia argued, saying he was not at the point of being “comfortable enough” to send it to the voters.

Although she voted in favor of the package, Republican Alderman Joanne Philbrick mostly spoke against it during council debate.

“I don’t understand the rush,” Philbrick said during council discussion. “How come we weren’t included in the conversation? Why now, why does it have to be now, and why is it eight-and-a-half million, when the original bond was $3.3 million? There’s too many unanswered questions.”

c.bessette@theday.com

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